Asian equities and KRW have muted initial response to North Korea’s latest missile test

TradeTheNews.com Asia Mid-Session Market Update: Asian equities and KRW have muted initial response to North Korea’s latest missile test; Upcoming US retail sales in focus, along with next week’s Sept 19-20 FOMC meeting

Asia Summary

- Asian equity markets have initially had a muted reaction to North Korea’s most recent missile test. According to Japan’s Defense Minister Onodera the missile launched might be an intermediate range ballistic missile (IRBM), as opposed to an intercontinental ballistic missile (ICBM). The UN Security Council is expected to meet later during the US afternoon.

- USD/JPY, Nikkei, US equity futures pare opening losses.

 

Key economic data

- (NZ) NEW ZEALAND AUG BUSINESS NZ MANUFACTURING PMI: 57.9 V 55.5 PRIOR

- (ID) Indonesia Aug Trade Balance: $1.72B v $0.6Be; Exports Y/Y: 19.2% v 8.3%e

 

Speakers and Press

China

- (CN) China NDRC: Higher inflation in Aug mainly due to ‘short-term’ factors; CPI and PPI to continue to be a ‘reasonable’ range; Will further open up foreign investment in finance and new energy vehicles.

Other

- (KR) North Korea fires a missile from Pyongyang towards the east, missile passes over Japan - South Korea press

- (KR) US Military: Detected single North Korea missile launch of an intermediate range ballistic missile (IRBM); did not pose threat to Guam

- (JP) Japan Def Min Onodera: North Korea missile may be intermediate range ballistic missile (IRBM) and possibly the same type that was launched on Aug 29th

- (JP) Japan Chief Cabinet Sec: Missile situation similar to that on Aug 29; launch caused no damage to ships or aircraft

- (KR) South Korea Military: Fired missile in a test into the sea, coinciding with North Korea's missile launch

- (KR) UN Security Council to meet at 3 pm EDT on the most recent North Korea missile test

- (KR) South Korea President Moon said to have been briefed yesterday about possible North Korea missile launch – South Korean Press

- (KR) South Korea President Moon: South Korea has power to ‘pulverize’ should North Korea provoke; Will not sit idle on North Korea provocation.

- (KR) White House: President Trump has been briefed on North Korea missile launch by his Chief of Staff Kelly

- (KR) US Sec of State Tillerson: Calls for China, Russia to take actions of their own regarding North Korea, as they must indicate their ‘intolerance’

- (KR) US President Trump to visit South Korea in Nov - South Korean Press

- (KR) NAND Flash prices expected to rise by ~15% for Q4; cites demand related to electronic devices and shortage of supplies which could last through Dec - Taiwanese Press

- (CA) Bank of Canada Wilkins: Not ideal to give markets full plan on rates, every rate decision is 'live'

- (PE) PERU CENTRAL BANK (BCRP) CUTS REFERENCE RATE BY 25BPS TO 3.50%; NOT EXPECTED

 

Asian Equity Indices/Futures (00:30ET)

- Nikkei +0.6%, Hang Seng +0.4%, Shanghai Composite -0.3%, ASX200 -0.6%, Kospi -0.15%

- Equity Futures: S&P500 -0.1% ; Nasdaq flat , Dax flat , FTSE100 -0.2%

 

FX ranges/Commodities/Fixed Income (00:30ET)

- EUR 1.1902-1.1924; JPY 109.56-110.44; AUD 0.7987-0.8005; NZD 0.7212-0.7240

- Aug Gold +0.4% at 1,334/oz; Aug Crude Oil -0.3% at $49.74/brl; Sept Copper -0.2% at $2.956/lb

- GLD SPDR Gold Trust ETF daily holdings unchanged at 838.6 metric tons

- (CN) PBoC OMO: injects CNY200B vs injected combined CNY100B in 7,14 and 28 day reverse repos prior

- (CN) PBOC SETS YUAN REFERENCE RATE AT: 6.5423 V 6.5465 PRIOR

 

Equities notable movers

Australia

- Fortescue Metals, FMG.AU CEO to resign in early 2018; -4%

- Myer Holdings MYR.AU, Broker commentary; -4.5%

 

US markets on close: Dow +0.2%, S&P500 +0.5%, Nasdaq -0.5%, Russell -0.1%

- Best Sector in S&P500: Utilities +0.8%

- Worst Sector in S&P500: Consumer Discretionary -0.5%

- At the close: VIX 10.44 (-0.06pts); Treasuries: 2-yr 1.359% (flat), 10-yr 2.18% (-1bp), 30-yr 2.761% (-3bps)

 

US Market Summary

- US stocks opened lower after Aug CPI figures ran hotter than expected, raising investor rate hike expectations, and on some more reports of North Korea preparing for another missile test. However the S&P and Dow recouped most of their early losses, at another close near all-time highs. The Bank of England helped push global rates higher and boosted the pound sterling to a one year high after Governor Carney hinted a turn could be coming for rate policy in the UK. Copper prices have now fallen

~7% from recent highs, while global mining names underperformed in the wake of soft Chinese economic data. The dollar softened, while Treasury yields rose on the shorter end of the curve. Crude hit its highest levels since May, boosting energy names on the day, while telecom and consumer discretionary sectors are in the red.

 

US Afterhours Movers

-ORCL Reports Q1 $0.62 v $0.61e, Rev $9.21B v $9.02Be; Total Cloud rev $1.47B v $969M, +51% y/y; +1.9% afterhours